Category: M&A

Ameron International Corporation has completed the acquisition of Polyplaster, a privately-owned, fiberglass-pipe manufacturer in Betim, Brazil, near Belo Horizonte. Polyplaster primarily supplies polyester, fiberglass-pipe systems to the water, wastewater and industrial markets in Brazil. Ameron sees the acquisition as providing a solid base for an expansion program in South America. It also plans to construct two new plants in Betim in the near future and intends to serve all South American markets from Brazil. “The demand for epoxy fiberglass pipe in South America is strong, and the company expects to significantly enhance its competitive position in South America with these investments,” says Ameron. Terms were not disclosed. Ameron is a multinational manufacturer of highly-engineered products and materials for the chemical, industrial, energy, transportation and infrastructure markets. It is listed on NYSE.

Following rumors of a deal, Royal Bank of Canada has announced a $2.2bn acquisition of RBTT Financial Group. RBTT’s board has approved the transaction, worth TTD13.8bn, and shareholders will vote on the TTD40 per share offer, paid in cash (60%) and RBC shares (40%). The combined entity will boast $13.7bn in assets and 130 branches in 18 Caribbean countries and territories. RBTT had been in discussions with potential buyers since April and suitors include Canadian rivals Scotiabank and CIBC, through its FirstCaribbean unit. RBC says the offer represents an 18% premium on the closing price of RBTT shares September 28, as well as a 27% premium to the average share price of TTD31.44 over the last 12 months. The transaction is expected to close by mid-2008 and the merged entity will be headquartered in Port of Spain. “This is a transformational acquisition for RBC in the Caribbean, one that extends our reach into many important markets, notably Trinidad and Tobago, Jamaica, and the Dutch Caribbean,” says Peter Armenio, RBC’s head of US & International Banking. Credit Suisse was the advisor to RBTT and had been working with the institution for a while. Merrill Lynch was hired to give RBTT a fairness opinion.

Mexico’s Aluprint, a printing and packaging company, is seeking to raise $135m in a dual currency loan to help it pay for the acquisition of Global Packaging, which is headquartered in Miami and has a plant in San Luis de Potosí. The company is looking for a $120m senior secured term loan and $15m equivalent revolving credit line in pesos. GE Capital Markets is leading the deal, launched to MLAs last week, say bankers not on the deal.

Bankers generally are bullish across the board for M&A in all sectors and most countries. With an investment grade nearing for Brazil, there will be a wave of acquisitions, with Brazilians firms buying local or international companies, Pedro Guimarães, director at UBS Pactual in Brazil, tells LatinFinance. He expects high grade Brazil in late 2008 or early 2009. He also expects a string of sizable IPOs from Brazilian insurance companies as a result of new regulation calling for greater capital base. Next year will be the best moment in Brazilian history for IPOs, he predicts. “It will be the first time that we will manage to grow with the capital markets effectively as an option for investment in the economy,” says Guimarães. UBS Pactual is a dominant player in the Brazilian equity market, with more than 20% market share, according to Dealogic.

Brazilian steelmaker Gerdau has clinched participation from 12 banks for its $2.75bn acquisition financing and will today launch the deal to general syndication with a meeting in New York, followed by one in São Paulo Wednesday. In addition to bookrunners JPMorgan, HSBC and ABN AMRO, nine have joined as MLAs with $300m tickets apiece: BBVA, Standard Chartered, Tokyo Mitsubishi, Sumitomo, Mizuho, BofA, Itaú, Banco do Brasil and WestLB. The loan includes a 5-year trade related piece at Libor plus 100bp, a 6-year trade piece at Libor plus 125bp and a 5-year working capital facility at the same spread. The transaction is described by loan market participants as highly successful, considering it is the first to be launched following the August credit meltdown. Pricing was attractive enough to draw in a decent number of banks, and all 12 participants can expect to be reduced significantly. Gerdau is using proceeds to buy Chaparral Steel in the US.

Marfrig’s Mercosur expansion is positive for the credit outlook, according to Moody’s. “Although these acquisitions present integration challenges , they are positive for the rating to the extent that geographic diversification of raw material sourcing increases and the potential impact of closure of export markets due to animal disease decreases,” says Moody’s analyst Soummo Mukherjee. Brazil’s Marfrig is offering $267m for a 70.51% piece of Argentine meatpacker Quickfood, which also has operations in Uruguay. Quickfood exports to LatAm, Europe, Asia and the Caribbean. Moody’s affirmed the B1 ratings and stable outlook and notes that the exact financing of the transaction has not yet been finalized. However, at the end of June 30, Marfrig had a cash and cash equivalent balance of BRL987m and an undrawn committed facility of USD100m to cover the company’s short-term debt of BRL112m, working capital needs and growth investments, including capital expenditures and strategic acquisitions. “The current B1 rating and stable outlook assumes that Marfrig will preserve its comfortable liquidity cushion and maintain debt to Ebitda below 4.0x according to Moody’s definitions. Marfrig’s debt to Ebitda was 3.6x for the last 12 months ending in June 30,” says the agency.

Colombia’s Bancolombia Monday reiterated its view of the merger that created it, amid continued investigation into alleged irregularities. “Bancolombia reaffirms its view that the acquisition process of Banco de Colombia by BIC and the subsequent merger of these two entities were conducted in accordance with international customary standards and practices for this type of transaction and in accordance with Colombian law,” says the bank. “This acquisition process was validated at the time by the respective Colombian authorities,” it adds. The investigation focuses on an alleged unlawful approval of a transaction by the board of directors of the Central Bank of Colombia and the board of directors and the president of Banco Industrial Colombiano (BIC) during the acquisition of Banco de Colombia and its subsequent merger. Bancolombia local shares fell 1.59% Monday, amid a 1.08% retracement in financial stocks.

Nemak, the Mexican autoparts maker owned by Grupo Alfa, has launched a $640m 5-year term loan to help pay for its acquisition of three European parts companies. The financing, which has a 3-year grace period for principal repayment, will be pay between 65bp-85bp over Libor, based on a leverage grid, according to bankers close to the deal. HSBC, Citi, BBVA and Standard Chartered have joint books and will be looking for participation from an additional four MLAs, say bankers.

ICA and GSIP, the operators of the first FARAC concession and the effective borrowers of $3.7bn in loans for the endeavor, are keeping a tight lid on plans to take out the $3.1bn peso-denominated acquisition facility, currently being syndicated out. Prospective participants cite the takeouts for the 7-year facility as critical information, given the scale and currency of $300m MLA tickets. But people close to the offer say the consortium is wary of committing to a time frame, in part out of fear of convoluting the syndication process. A 7-year hold would be both undesirable for lenders and unlikely, but beyond that it is unclear what the borrowers have in mind.